Republican Tax Plan Would Screw "Violent Video Game" Companies

Tax credits are the kinds of things that most video game lovers wouldn't think about when considering where their favorite releases come from. But the publishers and developers that distribute and create games depend on them when figuring out the financials of their particular businesses. Now, a Republican tax proposal would deny that relief from companies who make "violent video games." That, to me, seems pretty ill-advised.

The Tax Reform Act of 2014—a would-be overhaul of the U.S. Tax Code presented by GOP representative and House Ways and Means Committee chairman Dave Camp—explicitly states that the new tax code would prevent "makers of violent video games from qualifying for the R&D tax credit."

The line in question refers to the research and development credit that provides tax breaks to companies who develop new technologies and practices in their respective fields.

Broadly put, tax credits are generally used as incentives to keep jobs and talent in a particular geographical location. California and Texas, for example, offer tax incentives—sometimes in the form of cash grants and sales tax exemptions—to video game companies to entice them to either set up shop or stay in each state. There are rules, like needing to have employees live in the state and having to spend a certain amount of money in a certain locality, but it's money you can get back from the state or not have to pay in taxes just for making games in a particular place.

The use of tax credits as it relates to the video game industry hasn't been without controversy but the problem here is that the The Tax Reform Act of 2014 is yet another attempt to legislate subjective morality onto video games. Preventing companies that make "violent video games" from qualifying for this credit applies a value judgment on the worth of their work. Seems to me that the political formula is embarrassingly transparent; it's an extension of the mindset that blames video games for social ills. This thinking seems particularly wrongheaded given the 2011 Supreme Court ruling—which was a result of Democrats going after the gaming industry, mind you—that afforded video games the same Constitutional protections that movies, book, and TV shows have enjoyed. Those other entertainment industries produce fare that might be deemed harmful, irresponsible or in poor taste but their tax incentives aren't being used as a political volleyball.

Worst of all, if this proposal becomes the law of the land, it could drive video game development off of American shores, since EA, Activision and many other game companies make the kinds of games that could be defined as "violent." The Tax Code of 2014–which aims in part to help American businesses be more competitive globally—might an enemy that the video game business can't defeat.